Equity markets rallied when Donald Trump was elected president in November 2016, even as bond markets saw interest rates rise. Risk was back on. In the weeks following the election, listed real estate securities enjoyed rising stock prices, though not at the same level as the S&P 500 Index, which reached successive highs. Markets were signaling their expectations for lower corporate taxes and economic stimulus that could push U.S. GDP growth higher than initially forecast.
The story of the election rally — the Trump trade — was one of growth stocks outperforming value stocks. Although growth stocks rallied from November onward, some of the momentum began to ease in May, amid growing concerns the scandal-plagued Trump administration would have difficulty executing policy goals.
For real estate securities, though, the environment has been more challenging. Prior to the election, REITs experienced “a major headwind” in the form of rising interest-rate expectat